Many City insiders increasingly believe that the push to regulate banks better after 2008 has gone too far in stamping out healthy risk-taking.
Mr Bresler added: “We’ve seen a lot in consumer duty. I certainly think that maybe outside the US we are held to the highest standard from a regulatory perspective. That is a great thing but also very challenging for businesses like us because the burden is significant.”
The increase in red tape “creates an issue for small businesses because your entry barrier is so high,” Mr Bresler said.
Because the cost of setting up a new bank is so high. Which is weird. Because in all other respects the setting up of a new bank is getting ever cheaper. The internet, there’s off the shelf banking software and all that. We should be seeing an explosion in new banking licences. We’re not….
Fairly simple – current common opinion is that all banks and businesses are teh evilz and must be prevented from their evil ways. From opening a bank account to opening a bank, there is a presumption of guilt and a requirement to provide copious evidence and assurance that you’re not.
In part this is fair, because the internet allows anyone to do business anywhere almost instantly and at little cost, which is fantastic for fraudsters. However, the protectionism and handbag clutching doesn’t seem to encourage free business.
It would perhaps be instructive to look at Estonia, which has embraced online business, to great success and apparently without becoming the fraud capital of Europe.
Because the BoE / Regulator / HM Treasury keeps bailing the old banks out instead of letting them fail.
What is the advantage of switching from one bank to another? Most people in the UK pay no banking fees. Business banking may well be different, but retail banking is fee for the most part. In my case I could buy some of the monthly add-ons, but these simply provide extras like travel insurance or break down cover.
@Salamander
Among the many, many reasons for switching are the levels of service you get, or don’t get, from the old banks.
I used to have a business bank account with the Co-op (don’t laugh). They were fucking useless at getting anything done. The UI and facilities offered by their online services were shameful and over time got worse, not better. The diversity hires at the branches couldn’t do anything useful at all. All they ever seemed to do was take in mountains of pennies from market traders.
I moved to Monzo. The app is astonishing and does everything I could possibly need, right there, including allowing me to move money freely between the current account and “savings pots”. When I’ve needed help the online service has been a great deal better than the Co-op’s legacy shambles.
I can’t see any reason at all to use a legacy bank, but then again I don’t go cap in hand to banks looking for loans and capital.
Because people most people don’t want to give their money to a completely virtual organisation. If something goes wrong with my Barclays account I can physically go to their nearest branch, and start complaining bitterly. Try doing that to an AI online ‘help line’………as this bloke found out:
https://www.bbc.co.uk/news/articles/cj6epzxdd77o
People want security for their money. They don’t want to give it to the latest fly by night private equity merchant who might be here today bust tomorrow, taking all their money with them.
A significant number of new banks have been set up over the last few years. These are digital banks with no high street branches, instead customers use an app or website. No chequebook but a bank card (using LasterCard or Visa systems) for payments and cash withdrawal. Cheques (up to a limit) can be paid in via the app by taking a photo of it. Cash or cheques can be paid in at a Post Office.
My digital bank offers business account and foreign currency accounts, deposit accounts . It also pays interest on current accounts in credit.
Jim. Have you actually tried physically going to your nearest Barclays branch, and starting complaining bitterly? When I did that they suggested I either went online or spent an hour & a half waiting to get through to customer service. They said there was nothing they could do from the branch.
@BiS: The point is there is a building in town which says Barclays on the side. Its not going anywhere. It represents a degree of solidity and permanence that an app on your phone that one day may just stop working can never have.
I went to a telephone bank (First Direct) 20+ years ago after my previous bank (TSB) decided the best way to deliver customer service was via a call centre 70 miles away
Never looked back, it’s now effectively an internet bank but I can still phone them, talk to a human who is empowered to sort things out and doesn’t follow a script
And no damn chatbots
The newest clearing bank in 200 years ( or something ) turmed out to be a ponzi scheme run by a catamite of Peter Mandelson.
@Jim
“ The point is there is a building in town which says Barclays on the side. It’s not going anywhere.”
There were four big name banks in the town where I live. Now there is one, and it isn’t the Barclays that we used to have.
Jim, the last Barclays I went into seemed to an area where you could access the information terminals out of the wind & rain. There was one person behind a sheet of armoured glass to to tell you which terminal to use to answer your enquiry. There may well have been other Barclays employees in the branch. But if there were, they were hiding firmly out of sight of customers. Maybe one gets to see one if it’s thought they may be able to sell one a Barclays “service” but not if one has a problem whilst trying to use it.
There isn’t much to choose between the banks. Money in, money out, that’s 95% of the job. The differentiating features are chocolate sprinkles on top: virtual “pots” of money; an app where your children can earn pocket money for chores; no-fee overseas spending; air miles on your credit card; 4% interest on balances up to £1,500 (first year only).
See also mobile phone companies. There’s almost nothing to choose on, except price.
I’m not Spud saying the government should run the banks. But the fact that there aren’t many new entrants seems normal, given the nature of the industry.
@Jim
The point is there is a building in town which says Barclays on the side.
The one in my town that used to say that is now an estate agents. The one that used to say Midland is now a coffee bar, as is the one that used to say Santander. There are no bank branches left in my town.
My town is Crouch End, in North London.
“There are no bank branches left in my town.
My town is Crouch End, in North London.”
You’ve got 4 Barclays branches with a mile of two of Crouch End. Wood Green, Stamford Hill, Tottenham, Holloway Rd. I have to drive 5 miles to get to mine. The point is there are still branches. Internet Bank Inc, not so much.
When the estate agent was still a Barclays branch I needed a 2nd business credit card on our account, so went in to ask for one. Despite it being a sizeable branch no-one could do anything except direct me to a phone in the corner, from which I could call the computerised answering system.
I did, to discover that nowhere in the bot’s decision tree was there an entry for “I need a 2nd business credit card on our account, please”. I spent about 10 minutes trying different requests and going nowhere until I had a brainwave, and called the bot again.
“I want to close my account.”
“You want to close your account? Is this correct?”
“Yes, I want to close my account.”
“Please hold the line while I get someone who can help.”
Within 5 seconds:
“Hello, I understand you want to close your account?”
“No, I need a 2nd business credit card on our account, please, but your robot doesn’t understand this.”
“Oh, I see. I can help you with this. Just hang on a moment, please.”
Within 2 minutes I had a 2nd business credit card on our account.
Remind me again of the use of a bank branch?
Oh, and getting a 2nd card on Monzo? Piece of piss, all in the app. You can even call and talk to them. I have.
All depends on what you need. I have never run a business so I cannot really comment on what business banking is like. if I did, then I might be more inclined to try out other banks. From a retail banking point of view, I see few advantages to switch. The banking app works, the website works when I log in. I only need the branch on the odd occasion where I have a large cheque to deposit.
Why change banks? for the free stuff they give you:
Free Disney+, Free Apple TV, 2% cashback on direct debits, 1.5% cashback on spending, etc
by setting up a couple of standing orders to “juggle” money around i get things that i was paying for or money for things i have to pay for.
And no new banks – Zopa has opened recently as a bank (new banking licence and all) so they are coming, they are just different to the old ones
Cornwall bloke – how does much of your valuable time does arranging all of that cost?
This morning’s healines include someone who had over £165k scammed out his Revolut account in less than two hours, including £67k after he rang the fraud helpline.
I can walk to my Lloyds bank in the next town faster than Revolut put Jack through to the right department.
I’m with Jim on this one
Obviously I should run if someone was emptying my bank account
To be fair when we recently had to fly back to the UK to deal with a relatives death the staff at the Lloyd’s branch we went to was extremely helpful in sorting out the situation
I have an online-only bank, but also keep a Lloyds one for spare because I’ve always found them pretty good, online for simple stuff and in the branch for anything complicated.
But Barclays are a waste of time. I also had an account with them and, as others have said, if you go into the branch they just tell you to ring the call centre. No point having a physical branch with them.
Deveril – each one took about 2 mins (online banking makes life easy) so 30 mins all in and that’s it, save / make about £600 per year so about £1200 per hour… Not bad really.
I had a Barclays business account because they had a branch where I lived.
The counter service was very limited their business manager was miles away. Their service was crap and I hated them. They joined BT and Dell Computers on my terror hit list.
I moved online only to BoS and they were fantastic in comparison. Any branch stuff could happen at a Halifax. It was just basic services that they provided, but Barclays couldn’t even manage that.
I closed my business after the missus died. Not sure who I’d use today.
@ Jim
Having lived in Crouch End, getting any of the branches you’ve listed apart from Wood Green would be a damn sight more difficult that 5 miles of rural driving. You’d have to walk or go by bus because you’d be certain of not finding anywhere to park. Half of them are at least two changes of buses & travelling by bus in London is a prospect one approaches with caution. in the latter years I lived there I doubt if I did more than half a dozen times.